Opinion
No. 31853.
November 18, 1935.
1. PARTNERSHIP.
Partner held not liable as surety on appeal bond from justice of peace court, which bond partner had not signed and had not authorized to be signed, and of which he had no knowledge, and did not acquiesce in signing of his name to bond by clerk of partnership (Code 1930, sections 64, 67).
2. PARTNERSHIP.
Partner held not liable on appeal bond from justice of peace court which was signed with authority of copartner in name of partnership, where partnership was mercantile firm not engaged in business of making surety bonds and copartner was without authority to bind partner unless authorized so to do by scope of partnership, or by partner (Code 1930, sections 64, 67).
3. PARTNERSHIP.
Partner has no implied authority to sign firm name as surety for third person, and burden is upon party claiming as against such partnership signature to show that signature is authorized as to suretyship.
APPEAL from the circuit court of Neshoba county; HON. D.M. ANDERSON, Judge.
E.M. Livingston, of Louisville, for appellants.
A nonconsenting member of a partnership is not bound by his co-partner's unauthorized act in becoming a surety for another, the other partner having received no benefit from the transaction, and it being foreign to the firm business, even though the obligee was ignorant of the partner's want of authority.
Persons v. Oldfield, 101 Miss. 110, 57 So. 417.
This court has repeatedly held that partners cannot sue or be sued in their partnership name, but must be sued as individuals and must bring suits as individuals and in the names of the persons composing the firm instead of the partnership name.
Blackwell v. Reed, 41 Miss. 102; Ivy v. Evans, 132 Miss. 652, 97 So. 194.
It is respectfully submitted that a judgment taken against a partnership in the firm name is void and the enrollment of the judgment in that form constitutes no notice whatever to an innocent purchaser.
The assignment from Woodruff to claimant recites the fact that Woodruff was indebted to Wm. R. Moore Dry Goods Company in the approximate sum of two thousand five hundred dollars on February 5, 1934. This being true the consideration for the assignment was a good and valid consideration under the provisions of section 2681, Code of 1930.
Sections 2682 and 2708, Code of 1930.
Z.A. Brantley, of Louisville, for appellants.
We call the court's attention to the fact that the judgment itself is void and of no effect for the reason set forth in the brief of Hon. E.M. Livingston for the claimant, Wm. R. Moore Dry Goods Company, and the authorities cited by him thereunder being, Blackwood v. Reed, 41 Miss. 102; Ivy v. Evans, 132 Miss. 652, 97 So. 194, which he cites in support of this contention; and since the proof in this case clearly shows that Mr. Woodruff did not sign the bond or authorize any one to sign the bond for him individually or to sign the name of S.D. Tyson Co. thereto, and with this uncontradicted proof this suit is settled and controlled by the case:
Persons v. Oldfield, 101 Miss. 110, 57 So. 417.
R.W. Boydstun, of Louisville, and J.B. Hillman, of Philadelphia, for appellee.
In the light of all the facts and circumstances as shown by the record the learned circuit judge was right in holding that the appellant, Woodruff, either signed the bond in question, or authorized his signature thereto, or acquiesced therein, and in overruling the motion to vacate the judgment.
The appellant, Wm. R. Moore Dry Goods Company, was not a purchaser of the indebtedness mentioned in the assignment without notice and the circuit judge who heard this cause and had adjudicated the validity of the bond herein in question with all of the facts before him was right in dismissing the claim of appellant, Wm. R. Moore Dry Goods Company, and this cause should be affirmed against the movant, E.L. Woodruff, and against the claimant, Wm. R. Moore Dry Goods Company.
This case arose on a motion to vacate a judgment rendered in the circuit court of Neshoba county against E.L. Woodruff, individually, and S.D. Tyson Co., as sureties on an appeal bond from a justice of the peace court. Earl Barmore instituted a replevin suit against Arthur Lillis for the possession of an automobile. The judgment of the justice of the peace was against Barmore. He desired to appeal therefrom, and the appeal appeared on its face to have been executed by Barmore as principal, E.L. Woodruff, Paul Chamberlain, individually, and S.D. Tyson Co., as sureties on the appeal bond.
On November 3, 1930, the circuit court rendered a judgment against the principal and the above-named sureties on the appeal bond for the value of the automobile and costs of the court as required by sections 64 and 67, Code of 1930. That judgment was enrolled in the circuit clerk's office in Neshoba county. Subsequently, on the 3d of November, 1932, the judgment was enrolled in the circuit clerk's office of Winston county showing enrollment against Earl Woodruff (not E.L. Woodruff), S.D. Tyson Co., and others. In the original judgment, as well as in the enrollments thereof in the two counties, it does not appear who composed the partnership of S.D. Tyson Co. This record shows that S.D. Tyson Co. was a firm composed of Paul Chamberlain and E.L. Woodruff. Subsequent to the enrollment of the judgment in 1932, a garnishment was issued thereon naming a number of individuals as being indebted to E.L. Woodruff, and they were cited to appear and answer in the circuit court of Neshoba county. They answered admitting an indebtedness to E.L. Woodruff and paid the amount thereof to the clerk of the court.
Thereupon Wm. R. Moore Dry Goods Company entered its appearance in that court and filed a claimant's affidavit to the funds, by virtue of a written assignment executed by Woodruff in favor of said company subsequent to the enrollment of the judgment and prior to the service of the writ of garnishment. This appearance of Wm. R. Moore Dry Goods Company was voluntary — without process. Woodruff appeared in that court and moved to vacate the judgment on the ground that he did not sign the appeal bond and did not authorize anyone to sign his name thereto; that he was engaged in a mercantile business; that said bond was signed without his authority, knowledge, or consent, and the party so signing his name was acting without the scope of his authority. No point was made on the pleadings in this case, and oral evidence was offered on the motion. Upon the hearing the court declined to vacate the original judgment and dismissed the motion and the claim of Wm. R. Moore Dry Goods Company, it being recited in the judgment that both issues were tried before the court by agreement of all parties.
The evidence is to the effect that Clay, who was a clerk of S.D. Tyson Co., attended the justice of the peace court in Neshoba county at the time of the trial of the case of Barmore v. Lillis, and that he was trustee in a deed of trust executed by Barmore on personal property, including the automobile for which the replevin suit was instituted. It appears that Chamberlain was interested in assisting Barmore to recover the automobile. It is testified that the security which the firm had was ample without including the automobile. When Clay, in company with Barmore's lawyer, was about to leave the store, Chamberlain instructed him that if an appeal bond was necessary he should sign thereto the firm name of S.D. Tyson Co. as surety on such bond. The evidence is clear, unequivocal, and undisputed that E.L. Woodruff did not authorize his name to be signed to an appeal bond in a judicial proceeding, that he did not know that same was signed, and that he in no manner authorized the signing of his name to the bond. It must be noted that the signing of the name of E.L. Woodruff to the appeal bond by Clay, without any authority whatever so to do, did not purport to name E.L. Woodruff as a member of the firm of S.D. Tyson Co., nor was the judgment rendered against him as such member of said firm.
It is quite clear from this evidence that this judgment was rendered against E.L. Woodruff upon a bond which he had not signed, which he had not authorized to be signed for him, and of which he had no knowledge, nor had he consented to, nor acquiesced in the signing of his name to such bond. There is no dispute in the facts on that question, so that clearly on the individual signature there was no liability as against Woodruff, and judgment against him was procured without his knowledge and consent and without his ever having a day in court.
The question then presented is: The bond having been signed with the authority of Chamberlain, a member of the partnership, in the name of the partnership, was E.L. Woodruff bound thereby? We leave out of view the contention that the judgment against all of the other sureties would be void because the judgment against E.L. Woodruff, entered in accordance with sections 64 and 67, Code of 1930, is void. See Helmer Bros. v. Hastings, 142 Miss. 403, 107 So. 551; Leathers v. Fred O. Howe Co., 108 Miss. 1, 66 So. 280.
We are of opinion that there was no valid judgment, and therefore no valid writ of garnishment in this case, as to E.L. Woodruff, for the reason that this record shows that the firm of S.D. Tyson Co. was a mercantile partnership not engaged in the business of making surety bonds and Chamberlain, the managing partner, was without authority to bind Woodruff, his partner, unless authorized so to do by the scope of the partnership or by Woodruff.
The firm of S.D. Tyson Co. was not a party to the litigation between Barmore and Lillis. In the case of Persons v. Oldfield, 101 Miss. 110, 57 So. 417, this court held that a nonconsenting member of a partnership is not bound by a copartner's unauthorized act in becoming surety for another, the other party having received no benefit from the transaction, and it being foreign to the firm business, even though the obligee was ignorant of the partnership's want of authority. The court further held that the power of one partner to bind his copartner is based solely upon the ground of agency, and one cannot bind the other except within the scope of agency.
There is no implied authority to sign the firm name as surety for third persons. See Sylverstein v. Atkinson, 45 Miss. 81; Andrews v. Planters' Bank, 7 Smedes M. 192, 45 Am. Dec. 300. The burden is upon the party claiming as against such a partnership signature to show that the signature is authorized as to suretyship; the converse is true as to commercial paper. In the case of Doe v. Tupper, 4 Smedes M. 261, 43 Am. Dec. 483, this court plainly announced the rule applicable to this case in an opinion written by Judge SHARKEY, and which is well stated in the syllabi as follows:
"As a general rule, one partner cannot bind another by writing under seal.
"Judgment was obtained against S. and G. as partners; G. executed a forthcoming bond, and signed the partnership name thereto, which bond was forfeited. Held, that this bond was invalid as to S., and the statutory judgment equally invalid.
"S. and G. being partners, G. signed the partnership name to a forthcoming bond, which was forfeited, and the real estate of S. was levied on under an execution on the bond, and sold to T.; afterwards S. sued T. in ejectment for the land. Held, that the judgment against S. on the bond could be collaterally attached in this suit, and shown to be void for want of jurisdiction in the court to render it.
"As a general rule, it is too late to object to a forthcoming bond after the return term; but it is never too late for one who is not a party to it to object to its operating to charge him.
"Even if it be the law, that in judicial proceedings one partner may give a bond which will bind the firm, yet the rule cannot apply to a bond which is to become the foundation of a judgment, without further notice to the party who did not sign it.
"A bond signed by one partner in the partnership name is absolutely void, not merely voidable; and though such bond may become obligatory by the subsequent acquiescence of the party not signing it, that acquiescence is only evidence that the other partner had power to sign the joint name.
"Where one partner, without authority, signed the name of his copartner to a forthcoming bond, which is forfeited, the judgment thereon will not bind the party not signing it, even though he were a defendant in the original judgment; nor will a sale of property of the party not signing the bond, under execution upon it, pass any title."
The signature of the firm by Chamberlain or his agent to a judicial bond on which judgment would be rendered without process or notice is without the scope of the partnership, and Woodruff did not thereafter acquiesce therein.
The judgment of the court below should have been vacated; therefore the cause is reversed.
Reversed and remanded.